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Misclassification doesn’t matter if pay meets minimum

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in Employment Law,Human Resources

What happens if you misclassify an independent contractor and it turns out she should have been an hourly employee? Regardless of status, you don’t have to worry about meeting a minimum wage requirement if she earned enough to average out to the minimum wage.

Recent case: Leslie signed an agreement to sell auto insurance as an independent contractor. She soon found that she wasn’t having a lot of success since the company’s minimum credit score to qualify for coverage was higher than the average score in her territory. She quit and sued, alleging she should have been paid minimum wage.

The court dismissed her claim, reasoning that even if she were right about being misclassified, she had made enough money to average out at least to minimum wage for hours worked. (Smith v. Auto Club, DC MN, 2017)

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